The next time someone claims that not having intellectual property laws will squash the little guy and let established companies rule the day, I’m going to remember to bring up Netflix. Mike Masnick at Techdirt reports on Blockbuster’s recent decision to file for bankruptcy — after the heroic Netflix has stolen most of their customers:
Late last week, there were a ton of press reports about how Blockbuster was preparing to declare Chapter 11 bankruptcy in September. It’s not shutting down, but just trying to restructure its debt, get out from under a bunch of store leases and try, try again. That said, this is yet another example of the fallacy of the claim of many that if you have a good idea some big company will just come along, copy it, and be successful. It also demonstrates the huge difference between idea and execution.
Netflix had a good idea and executed well on it. But for years everyone thought it was only a matter of time until the company got destroyed, because all these bigger (at the time) companies were just going to copy Netflix and win. First it was Wal-Mart. The retail giant started a service that seemed almost identical to Netflix way back in 2002. Everyone thought there was no way an upstart like Netflix could compete with the likes of Wal-Mart. Fast forward two and a half years and Netflix took over Wal-Mart’s online DVD rental business, because Wal-Mart’s offering couldn’t compete. …
And, of course, there was Blockbuster. It came out with a Netflix-like offer around the same time that Wal-Mart did, and while it held on for much longer, it was just never able to build up the same sort of userbase that Netflix did, and now the company is going to declare bankruptcy and try to restructure once again.
More at the link. It just goes to show that when you give people a little liberty, you never know what someone will come up with. A giant like Blockbuster or even WalMart can spend as much money as they’d like trying to copy an innovative, well-executed idea, but at the end of the day, the one who best pleases consumers will rule.
Over at Forbes.com, Reihan Salam had something rather unexpected but very welcome to say about the CEO of a major corporation:
That the success of the Kindle is good news for Amazon should go without saying. But it represents a remarkable environmental advance as well. The publishing industry in the U.S. felled roughly 125 million trees and generated vast amounts of wastewater. And, of course, physical books have to be transported by trucks, which generate carbon emissions, exacerbate congestion, increase traffic fatalities and cause wear-and-tear on already overburdened roads. One assumes that Bezos didn’t have the environment foremost in mind when he pushed the Kindle concept forward, yet he’s arguably done more to fight climate change by threatening hardcovers and paperbacks with extinction than any number of environmental activists.
Salam goes on to argue that Amazon will ‘win the internet’ through the Kindle and its rapidly growing ebook sales. I don’t know about that. What does it mean to ‘win the internet’? He only considers Facebook as a rival. What about Google? Android and ChromeOS are poised to dominate the mobile phone and tablet pc markets, putting Google into direct competition with the Kindle. Then there’s Google Search, Books, Voice, Gmail, Docs, Maps, Chrome browser, TV, and so on and so forth.
But bravo to Salam for daring to recognize in public the (probably unintended) positive environmental externalities of business decisions and technological innovation driven by profit-seeking amidst market competition — indeed, for daring to rank them on par with or above that of ‘altruistic’ environmental activists.
Cross-posted at Is-Ought GAP.
On the Capitalism.org FAQ we find this jewel of an answer:
Why is “anarcho-capitalism” a contradiction in terms?
Those who attempt to combine anarchism with capitalism, make the error of confusing the peaceful form of competition of capitalism — trade, ideas, and dollars — with the brutal “jungle” form of competition of anarchism — brutality, whims, and bombs.
Have you ever thought what happens when one ‘corporate protection agency’ disagrees with another? By what method do they solve their dispute? They do it by competition not with dollars, but with guns. They seek to solve their dispute by resorting to force against each other, i.e., a perpetual state of civil war. Under such a system, which gang wins? The one that is the most brutal.
Ok let us add the precision it lacks to this sloppy argument. [Keep reading…]